A new survey from Mortgage Choice has found the majority of home loan customers are not prepared for the coming upswing in rates.
Mortgage Choice has released new findings based on a survey of 1,000 Australians, which revealed 55 per cent of borrowers did not know their current home loan rate.
Around 17 per cent of mortgage holders indicated that they would be concerned if home loan interest rates grew by just 1 per cent, while 48 per cent expressed concerns around a 2 per cent ascent.
David Zammit, national sales director, Mortgage Choice has calculated a 2 per cent increase in rates for some would nearly double the interest that they are charged each month.
One in two survey respondents said they could afford to pay an extra $201 a month and only 33 per cent of borrowers could afford to pay an additional $401 or more per month.
Around 31 per cent of borrowers indicated they were worried about rate rises, with those who had most recently purchased their first home and Sydneysiders being the most concerned, followed by residents in Melbourne, Adelaide and Perth.
Young people (aged 18 to 35) were the most concerned age group, with 89 per cent agreeing, followed by 36 to 64 year-olds (81 per cent).
But the Reserve Bank has “made it clear that there are further rate hikes to come”, Mr Zammit said, with most lenders have been quick to pass on the first increase to the cash rate in May.
– The Adviser